Worms Digest 28 June 2013

Good Morning !!!

Sensex: 18876 (+1.75%), Nifty: 5682 (+1.68%)

Dow: 15024 (+0.77%), S&P: 1613 (+0.62%)

Nikkei: 13649 (+3.29%)

CCEA approves the hike in gas price to US$8 from US$4.2

• In a pro-reforms move cabinet committee on economic affairs (CCEA) approved the hike in domestic natural gas prices to $8 effective April 1, 2014. Most of the people had doubted this move, given the strong opposition of fertiliser and power ministeries. Also given the election year ahead, such a move was considered to be detrimental of vote bank sentiments. 
• The hike in gas prices will be most benefitial to ONGC and Oil India. Reliance will also be major beneficiary if it manages to improve its gas production levels.
• The price of gas will be reset quarterly. 
• The brunt of higher gas price will fall on consumers who will have to pay higher prices for electricity, CNG and fertilisers which could ultimately lead to higher food prices. 

Govt raised MSPs of various crops in moderate fashion

• Minimum support prices for paddy was raised by 4.6% to Rs.13.10 per kg for normal paddy and 5% to Rs.13.85 per kg for grade A paddy
• Cotton MSPs saw marginal increase of 2.5-3% to Rs.37/kg for medium staple and Rs.40/kg for long staple. 
• MSP of yellow soyabean has been increased by Rs3.20 to Rs25.60/kg and for soyabean (black) by Rs3/kg to Rs30/kg
• Tur dal prices have been held constant.
• Government appears to have done fine job of balancing urge for higher MSPs in wake of cheering farmers closer to elections and on the other hand tackling inflation which has been the biggest menace over the last 2 years.

"Losers average losers"

...Paul Tudor Jones

Worms digest 27 June 2013

Good Morning !!!

Sensex - 18552 (-0.41%), Nifty - 5589 (-0.36%)

Dow -14910 (+1.02%), S&P - 1603 (+0.96%)

Nikkei - 13081 (+1.92%)

The Games ADAG Play - The Sasan Hole

• CERC has cancelled the commissioning status of Reliance Power's Sasan power project which was earlier claimed to have got commissioned during March 2013
• The date of commissioning is important as power tariff were set to increase 70% from the 3rd year since the year of commissioning which in this case would have been FY13

Health Ministry suspends sale of Rs.600crs diabetes drug - Pioglitazone

• Pioglitazone which continues to sale in major markets like US and Europe has been suspended in India by health ministry due to its sever side effects like urinary bladder cancer and heart failure
• Many companies including Ranbaxy, Lupin, Sun Pharma will get impacted due to this ban

Karnataka opens for FDI in retail

• The new congress government in Karnataka has given its nod for 51% FDI in multi-brand retail
• This is a big positive for Jubilant Bhartia's  retail chain, Total which is currently present only in Bangalore city. Total is the second largest chain in Bangalore with 5 hypermarkets  with over a million retail space.

Telecom

• In much awaited yesterday's EGoM meeting on spectrum pricing, EGoM has now thrown ball in TRAI's court and asked the regulatory body to recommend the right spectrum pricing within 60 days.
• Bharti has wrote a letter to Telecom minister Sibal to intervene in the matter of Rs.660crs penalty for 3G roaming pacts 
• Reliance Communications has tied up with Apple to offer iphone at cheaper tariff plans

GM crop hit by Politics and Policy deadlocks

• Just weeks after appraisal committee on genetic engineering gave its nod for various field trials for potential GM  crops, government has put the proposal on hold. 

'We don't like trading agony for money.'

....Charlie Munger

Worms digest 25 June 2013

Good Morning !!!

Sensex - 18541 (-1.24%), Nifty - 5590 (-1.37%)

Dow -14660 (-0.94%), S&P - 1573 (-1.21%)

Nikkei - 13147 (+0.65%)

Telecom - Keep fingers crosses

• Pricing war and competition may not be over yet...Sistema which offers services under MTS brand has launched new scheme under Rs.199, 30 day plan which entails unlimited  calls on its network...i.e. MTS to MTS. Customers also get 1000 minutes talk time on non-MTS networks.  
• Rumor mill also suggest that Sistema is in talks to buy out Tata's stake in telecom venture with Japan's NTT Docomo, which, suggests aggressive plans from Sistema for Indian telecom market and pricing will remain a key instrument to drive its market share. 
• Government is set to announce spectrum pricing today and telecom player would be keeping fingers crossed as to how much further reduction in pricing would be made after failure of auction in March. 

Jet-Etihad deal takes set back as ball is now in SEBI's court

“Investing should be more like watching paint dry or watching grass grow. If you want excitement, take $800 and go to Las Vegas.”
...Paul Samuelson

Good Morning !!!

Sensex - 19246 (+0.12%), Nifty - 5822 (+0.15%)

Dow -15112 (-1.35%), S&P - 1629 (-1.39%)

Nikkei - 13101 (-1.08%)

Ranbaxy fined Rs.80crs for anti-competitive pact

• European Commision levied a penalty of  €1,03,23,000 on Ranbaxy for delaying the marketing of its generic version of depression drug citalopram made by Danish company Lundbeck.
• In 2002, Lundbeck agreed with each of these companies to delay the market entry of cheaper generic versions of its branded citalopram, a blockbuster anti-depressant. These agreements violated EU anti-trust rules that prohibit anti-competitive agreements.
• Ranbaxy has decided to appeal against EU ruling as it believes that EU decision is based on misrepresentation of the facts.

Exide to be badly hit on rupee depreciation and falling OE demand

• P.K. Kataky, Managing Director and CEO told Business Line that Exide would be badly hurt by sharp depreciation in rupee as 50% of raw materials is imported.
• OEMs have cut their demand by 10% which would lead to lower capacity utilization. Exide derives 60% of sales from OEs and hence would be badly impacted due to lower  utilization and inability to pass raw material price hike to OEMs

Tata Motors unveils 8 refreshes and chalks out 2020 game plan for Cars

• Tata Motors unveiled 8 newly upgraded and enhanced products, across 5 brands
• Indigo eCS - significant changes in interiors as well exteriors
• Sumo Gold - refined engine; dual A/C cooling, USD connectivity
• Nano - indbuilt music system, 
• Indica - new transmission and suspension, dual tone interiors and exterior graphics
• 3 CNG  Variants  of Indigo, Indica and Nano
• Safari Chrome Explorer Edition - enhanced accessories 
• Also announced was HORIZONEXT, a four pronged customer centric strategy
• Intense product focus
• Focus on world-class manufacturing practices
• Enriched customer purchase experience
• Consistent quality of service
• HORIZONEXT will come up with a product pipeline till 2020 to rejuvenate the dyeing passenger car business 

"In the corporate world, if you have analysts, due diligence, and no horse sense, you've just described hell." -- Charlie Munger

Worms Digest 11 June 2013

Good Morning !!!

Sensex - 19441 (+0.06%), Nifty - 5878 (-0.05%)

Dow -15239 (-0.06%), S&P - 1643 (-0.03%)

Nikkei - 13513 (-0.01%)

RBI buries Cobrapost with minor fines to Top 3 private banks 

• RBI levied penalty of Rs 1 crore, Rs 4.5 crore and Rs 5 crore on ICICI Bank, HDFC Bank and Axis Bank, respectively for violation of KYC norms in its finding from investigations carried post Caobrapost allegations.
• However the central bank didnt find any gross violations or any prima facie evidence of money-laundering
• Effectively  RBI has burried the Cobrapost sting operations with minor fines to these banks

Advaniji plays the Last card - resigns for the third time in eight years

• Indian politics took a major turn today as Mr. L K Advani, last of the stallions who founded the country second largest political party resigned from three of the key posts apparently in protest of Mr. Narendra Modi being appointed as Chief to lead the party in 2014 elections. 
• The party is trying to pacify the senior leader but its unlikely to go back on its decision to make Modi the leader.
• Advaniji never had a great relationship with RSS which though reluctant earlier has now thrown its support behind Modi.

ITC is looking at entering Tea and Coffee market

• ITC is reportedly looking at strengthening its FMCG basket with addition of Tea and Coffee segments
• ITC has a commodity trading business which has helped the company gained immense understanding of commodity markets in general and believes its strong strong sourcing skills should be capitalized through forward integration

Race for WB's 31% stake in Haldia Petrochemicals

• RIL and IOC is locked in race to acquire 31% stake of West Bengal govt in India's second largest petchem company, Haldia Petrochemicals.
• The battle will be tough as many more private (Vedanta group, Jindals and Ruias) as well public sector undertakings like ONGC and GAIL are also interested in the assets
• The Chatterjee Group, co-promoters of HPL will have the first right of refusal 
• HPL has a capacity of 0.7 mtpa of ethylene and 0.35 mtpa of polymers